No power over BoT by Somkid’s committee, says central bank governor

By PHUWIT LIMVIPHUWAT
THE NATION

 

 

The central bank’s Monetary Policy Committee will remain autonomous and continue to base its monetary policy decisions on the existing criteria, said Veerathai Santiprabhob, governor of the Bank of Thailand.

 

Thailand’s central bank has raised its guard against future intervention in monetary policy by the deputy prime minister, Somkid Jatusripitak.

 

The Bank of Thailand (BoT) governor has guaranteed that the Fiscal and Monetary Committee to be appointed by Somkid “will not have any power” over the central bank’s monetary policies.

 

Somkid announced last week that he would soon appoint a committee to supervise the country’s financial stability. He was worried about a strong Baht hurting the economy.

 

Mainly created to maintain the Baht’s stability, the committee will be comprised of representatives from various financial and economic institutions such as the BoT, the Finance Ministry, the Securities and Exchange Commission (SEC) and the National Economic and Social Development Council (NESDC).

 

However, private sector representatives raised concerns after Somkid’s announcement, pointing to the need for the central bank’s neutrality and independence from interference, and noting that the committee’s duties seemed to overlap with the central bank’s role. 

 

BoT governor Veerathai Santiprabhob brushed off these concerns early on Tuesday, stating that the Fiscal and Monetary Committee is only meant to play an advisory role and will not impact the central bank’s autonomy. 

 

Veerathai was speaking today at the BoT’s annual “Bangkok Sustainable Banking Forum 2019”.

 

“The committee will be beneficial to the country, as it will allow different financial institutions in the country to work together to reduce income inequality and cope with global economic threats such as the on-going US-China trade war,” he said. 

 

However, he claimed, the committee will not be able to dictate the central bank’s monetary policies and will only act as advisors to the different financial and economic institutions. 

 

For instance, the central bank’s Monetary Policy Committee (MPC) will continue to base its policy interest rate decisions on the existing criteria, he continued. 

 

The BoT recently cut the policy interest rate from 1.75 per cent to 1.50 per cent. 

 

The key reasons for this decision included the negative impacts of the trade war on Thai exports, which has damaged the overall Thai economy, as well as the low level of inflation, the governor said. 

 

Going forward, he said, the central bank will increase its focus on the country’s financial stability, especially given that interest rates have been lowered.

 

Source: https://www.nationthailand.com/business/30374678

 

-- © Copyright The Nation Thailand 2019-08-13

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15 hours ago, webfact said:

BoT governor Veerathai Santiprabhob brushed off these concerns early on Tuesday, stating that the Fiscal and Monetary Committee is only meant to play an advisory role and will not impact the central bank’s autonomy. 

Thailand strikes me as the land of interference.  Are they autonomous like the courts ?

Pigs flying high...way up in the sky...

15 hours ago, webfact said:

Somkid announced last week that he would soon appoint a committee to supervise the country’s financial stability

In summary, Somkid appoints a committee to try to manipulate the Thai Baht and interest rates. Central Bank says no you won't; p!ss off!

Presumably this bright idea either came from or has the approval of PM Prayut seeing as he has appointed himself as the economic mastermind of the country.

When shit hits the fan, worldwide, Central Banks worldwide have nowhere to go as interest rates so close to zero. 

At last gfc, Interest rates was 6%. 

Cash up, folks. It’s going to be bye bye time for most .

 

And Buy Buy time for the rich

18 hours ago, webfact said:

The Bank of Thailand (BoT) governor has guaranteed that the Fiscal and Monetary Committee to be appointed by Somkid “will not have any power” over the central bank’s monetary policies.

To be contradicted by Somkid:

18 hours ago, webfact said:

Somkid announced last week that he would soon appoint a committee to supervise the country’s financial stability. (my bold)

Maybe a poor translation but taken literally:

• to be in charge of https://www.merriam-webster.com/dictionary/supervise
• to be responsible for the good performance of an activity or job, or for the correct behavior or safety of a person https://dictionary.cambridge.org/us/dictionary/english/supervise

At best confusing (seems to be SOP for Prayut regime) with a predictable failure of the committee due to BOT's alleged independence and at worse some degree of collusion between the government and BOT that can't be publicized.

Whatever, just devalue the bloody ฿.

1 hour ago, Brickbat said:

When shit hits the fan, worldwide, Central Banks worldwide have nowhere to go as interest rates so close to zero. 

At last gfc, Interest rates was 6%. 

Cash up, folks. It’s going to be bye bye time for most .

 

And Buy Buy time for the rich

A few countries have negative interest rates. Switzerland is minus 0.75%. Australia is now contemplating it.

It means depositors have to pay the bank to hold their money while borrowers get paid by the bank to borrow their money.